PADGETT BUSINESS SERVICES® of Dayton

Posted 4/11/2013

On Wednesday, April 10, 2013, at 1:00 p.m. the Committee on Small Business held a hearing titled: Small Business Tax Reform: Growth Through Simplicity. The meeting was held in Room 2360 of the Rayburn House Office Building.

The purpose of… the hearing was to receive testimony on several proposals to reform and simplify the tax code.  Over time, our tax code has become more complex and truly temporary, with tax relief being extended for one year, for months at a time or even retroactively. Taxpayers, and particularly small business owners, are spending more of their time and resources to comply with and adjust to onerous tax laws, instead of investing those resources and assets back in their businesses to grow. This hearing represented an opportunity for members to explore different proposals designed to simplify and reform the tax code.

Padgett Business Services is excited to have been the only tax firm asked to testify at this hearing on Small Business Tax Reform.

Witnesses and Testimony

Panel 1

•The Honorable Dave Camp, Chairman, Ways and Means Committee, Washington, DC

Panel 2

•Mr. Sam Griffith, President and CEO, National Jet Company, Cumberland, MD Testifying on Behalf of the National Tooling and Machining Association

•Mr. Steve Bearden, President and CEO, Linemark Printing, Upper Marlboro, MD Testifying on Behalf of Printing Industries of America

•Mr. Roger Harris, President and COO, Padgett Business Services, Athens GA

The hearing will being replayed online at the following link:
http://www.ustream.tv/channel/hclive15#/recorded/31251439

Notable Points in the hearing:

Panel 2 Starts Testimony: 1:00:00
Roger Harris Starts Testimony: 1:14:00

Please join us in making a difference for the small business owner!

Riverwoods, Ill. (March 19, 2013)

By Michael Cohn

As the April 15 tax filing date draws closer, millions of taxpayers still find themselves somewhere between putting the final touches on their tax return and just starting the process.

CCH is offering taxpayers who still hope to beat the clock with some easy tips for making the most of their taxes.

“Because of the delay to this year’s filing season due to last year’s ‘fiscal cliff’ negotiations and a lack of early answers pertaining to several specific taxes, many people may now find themselves rushing to get their taxes done,” said CCH principal federal tax analyst Mark Luscombe in a statement. “The risk is that they may make mistakes, or overlook ways to maximize their refund.”

Luscombe offers some easy tips to taxpayers on how to make the final weeks of tax season much less taxing:

• Take advantage of last-minute tax savings. For example, taxpayers can reduce their taxable income by as much as $5,000 or $6,000 if a taxpayer is 50 or older, and meets income requirements. Taxpayers have until April 15, 2013, to contribute to their 2012 IRA.

•  Get help! Taxpayers don’t have to go it alone at tax time. Either turn to a professional to help prepare and file the return, or try tax software that will ease and speed the process. These means will also help ensure taxpayers realize the full benefit of the credits and deductions they deserve.

• Double-check the income tax filing before sending. If information is omitted or a mistake is made, the processing of the tax return and/or refund can be delayed. Among common errors, check to ensure all Social Security numbers are correctly entered and that the tax return is signed, either manually (if mailing) or with an electronic PIN (if e-filing).

• E-file the tax return and use direct deposit. The combination of e-filing with direct deposit can mean receiving the tax refund in weeks rather than the months it may take to get a refund check in the mail from the IRS after filing a paper return.

• Adjust the 2013 withholding if taxes were overpaid in 2012. While many like the idea of getting a refund, a large refund may indicate a taxpayer is overpaying taxes throughout the year. By adjusting the withholding, a taxpayer can ensure he or she is not paying too much throughout the year.

Article Source: http://www.accountingtoday.com/news/Last-Minute-Tax-Tips-Taxpayers-File-66101-1.html

http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act

The link above is an explanation of the new health care law as it is explained by Wikipedia.

Full Health Care Law

Ever had a desire to read all 2,409 pages of the full health care law?

First there was Black Friday, then Cyber Monday. November 27, 2010 was the first ever Small Business Saturday. Small Business Saturday is the day we celebrate the Shop Small movement to drive shoppers to local merchants across the U.S. More than 200 organizations have already joined American Express OPEN, the company’s small business unit, in declaring the Saturday after Thanksgiving as Small Business Saturday.

For more info: http://www.smallbusinesssaturday.com/

$1.1 Billion in Unclaimed 2007 Tax Refunds

Blake Ellis
Wednesday, March 2, 2011

Did you forget to file your 2007 taxes? The IRS might have a nice check waiting for you.

Nearly 1.1 million taxpayers failed to file that year, and the IRS estimates they are entitled to $1.1 billion in potential refunds.

Half of those who failed to file are owed a refund $640 or more, the agency announced Tuesday. And it could be even more: The median potential 2007 refund for people living in Wyoming was a high $788, while New Hampshire residents are owed a median refund of $741.

“Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments,” the IRS said.

But Uncle Sam isn’t holding your money for you much longer.

If you don’t file your 2007 return by April 18, 2011, say goodbye to your refund forever. Taxpayers are only given a three-year window to claim refunds. After that, your money is scooped up by the U.S. Treasury.

If you do decide to finally claim your 2007 refund, remember that your check will be held until the IRS has received your 2008 and 2009 tax returns as well. And, if you owe other federal debts, child support or back taxes, the refund will be applied to those amounts.

In addition to a refund, some Americans may also be missing out on the Earned Income Tax Credit, which helps many low- and middle-income taxpayers.

1. Failure to report all taxable income. The IRS receives copies of all 1099s and W-2s and computers match these forms with the income shown on the return. A mismatch is a red flag!.

2. Returns claiming the home-buyer credit. First-time homebuyers and longtime homeowners who claimed the homebuyer credit should be prepared for IRS scrutiny. Submit proper documentation; first-time homebuyers should attach a copy of their settlement statement and longtime homeowners should attach documents showing prior ownership, for example records of property tax and insurance coverage. All claims for this credit are being screened. Remember, the credit is required to be recaptured if the home is sold within three years for homes bought in 2009 or 2010 and within 15 years for homes bought before 2009.

3. Claiming large charitable deductions. Charitable deductions that are disproportionately large compared to reported income, raise a red flag. Reminders: Get an appraisal for donations of valuable property and file Form 8283 for donations over $500.

4. Home office deduction. History has shown that many people who claim a home office don’t meet all the requirements and others may overstate the benefit. In order to take this write-off, the space must be used exclusively and on a regular basis as your principal place of business.

5. Business meals, travel and entertainment. Schedule C filers should be careful when claiming large deductions for meals, travel and entertainment. To qualify for meals or entertainment deductions, detailed records must be kept including the amount, place, persons attending, business purpose and nature of discussion or meeting. Also, receipts are required for expenditures over $75 or any expense for lodging while traveling away from home.

6. Claiming 100% business use of vehicle. It is extremely rare that an individual actually uses a vehicle 100% of the time for business, especially if no other vehicle is available for personal use. Keep detailed mileage logs! Also, be sure not to include actual auto expenses when using the standard mileage rates.

7. Claiming a loss for a hobby activity. It’s a red flag if a Schedule C loss-generating activity sounds like a hobby (horse breeding, car racing). The activity should be run in a business-like manner and for a profit!

8. Cash businesses. Cash-intensive businesses, for example taxi drivers, car washes, bars, hair salons, and restaurants, are targets since they are less likely to accurately report all of their taxable income.

9. Failure to report a foreign bank account. The IRS is intensely interested in people with offshore accounts, especially those in tax havens. Failure to report a foreign bank account can lead to severe penalties. Proper reporting is crucial!

10. Engaging in currency transactions. The IRS receives reports of cash transactions in excess of $10,000 involving banks, casinos, car dealers and other businesses, plus suspicious activity reports from banks and disclosures of foreign accounts. Those making large cash purchases or deposits should be prepared for IRS scrutiny.

11. Math errors. One of the most common reasons for an IRS notice is the simple mathematical mistake on the tax return. Take time to ensure all your calculations are correct to remain under the radar!

12. Taking higher-than-average deductions. Deductions disproportionately large compared to income is a common red flag. Be sure to have proper documentation!

By Aaron Kellly